These Two Ladders Perfectly Illustrate The Evolution Of Income Mobility And Inequality In America

ChildrenAP/Charles KrupaJust as likely to climb up the ladder.

A new study from Harvard looking at mobility has found that, contrary to popular belief, a child’s chance of moving up the income ladderhas not been getting worse in the United States.

However, the “Equality of Opportunity” study — based on a treasure trove of tax data — shows that the U.S. ranks consistently lower than most developed countries when it comes to mobility. From the New York Times:

The study found, for instance, that about 8 per cent of children born in the early 1980s who grew up in families in the bottom fifth of the income distribution managed to reach the top fifth for their age group today. The rate was nearly identical for children born a decade earlier.

Among children born into the middle fifth of the income distribution, about 20 per cent climbed into the top fifth as adults, also largely unchanged over the last decade.

Things haven’t gotten worse, but one of the study’s authors told the Times that the odds of escaping poverty are only half as high in the U.S. as in highest-ranked countries for mobility such as Denmark.

“Although rank-based measures of mobility remained stable, income inequality increased substantially over the period we study,” according to the study. “Hence, the consequences of the ‘birth lottery’ — the parents to whom a child is born — are larger today than in the past.”

This visualisation from the study shows how the “rungs” of the income ladder have grown further apart (that’s inequality at work) but a child’s chance at actually climbing those rungs hasn’t changed.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.